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Cary to continue grocery tax and place 1% non‑home‑rule sales tax on consent agenda to fund roads
Summary
Village staff briefed the Committee of the Whole on July 15 that state action will remove the current grocery sales tax on Jan. 1, 2026 unless Cary passes a local continuation, and staff recommended the village also use new authority to adopt a 1% non‑home‑rule local sales tax to help fund roads and other capital needs.
Village staff briefed the Committee of the Whole on July 15 about two revenue items: continuation of the grocery sales tax and a proposed 1% non‑home‑rule local sales tax. Staff said state legislation will remove the automatic grocery sales tax effective Jan. 1, 2026 unless municipalities enact local continuations; the village’s estimate for the grocery tax continuation is roughly $600,000 a year in recurring revenue.
The committee also discussed newly available authority for non‑home‑rule municipalities to adopt a local general sales tax since the fiscal‑year‑2025 budget process, staff said. That option allows non‑home‑rule communities to adopt up to 1.00% in increments (quarter‑point steps are possible) and could yield an estimated $750,000 annually for Cary at the full 1% rate, staff said. “If we don’t pass this, we will lose about $600,000 a year,” the assistant village administrator said while discussing the grocery tax continuation.
Why it matters: trustees said both measures would fund capital projects, with the village citing about $65 million in currently unfunded infrastructure projects over the next decade. Staff and trustees framed the 1% local sales tax primarily as a user‑pay mechanism to help fund roads, sidewalks, fleet and other capital needs.
Legal and timing notes: staff told the committee the grocery tax continuation is not a new tax but a local continuation of a state pass‑through; it must be put in place by ordinance and filed with the Illinois Department of Revenue in time for an effective date of Jan. 1, 2026. Staff said filings must be made no later than Oct. 1. The Village Attorney cautioned that non‑home‑rule and home‑rule municipalities have different legal authorities and that the village should confirm the statutory mechanics before final action. Staff said the Illinois Municipal League and local municipal groups coordinated to secure the authority for non‑home‑rule local sales taxes in the 2025 budget process.
Board direction and next steps: the committee agreed to place two separate items on the board’s consent agenda for the next meeting — one continuing the grocery sales tax and one adopting the non‑home‑rule local sales tax at 1%. Trustees asked staff to bring additional revenue projections broken down by 0.25% increments, and to continue public outreach and education before final adoption. No final ordinance was adopted during the meeting; staff said both items could be on the consent agenda at the next board meeting or at the August meeting in order to meet Department of Revenue filing timelines.
Ending: Trustees said they support protecting the grocery tax continuation and expressed majority support for pursuing the 1% non‑home‑rule sales tax to bolster infrastructure funding, with follow‑up materials requested on incremental revenue scenarios and outreach plans.
